UK’s Intertek finds growth in China is hard-wired

A company specialising in testing may not be the most obvious among the top 10
British businesses in China. But Intertek has ridden the boom in electrical
product manufacturing in the Asian economic powerhouse to become a British
success story, a new study shows.

The research says many of the successful British companies in China are led by chief executives who draw on their extensive global experience to act as corporate ambassadors for their companies there.Photo: AFP

Research by Worldofceos.com has compiled the list from FTSE 100 companies on the basis of the scale and success of profits and revenue growth, employee numbers, brand reach and power and the effectiveness and networking power of the companies’ chief executives.

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InterContinental, meanwhile, says it is the largest international hotel group in China, with more than 180 hotels across 60 cities. Last year, it announced it is developing Hualuxe Hotels and Resorts as the first luxury brand designed for the Chinese traveller.

IHG made revenues of $230m and operating profits of $81m from China in 2012 and says it sees the opportunity for Hualuxe to be in more than 100 Chinese cities within 15 to 20 years.

Steve Tappin, chief executive of World of CEOs, says the list’s constituents fall into two groups: traditional British trading companies that established a presence in China decades ago and entrants from the past five to 15 years.

Of the latter group, he says the most successful have been those that have approached China with a blank sheet of paper and been flexible and relentless in their efforts. “Many of them have been able to build partnerships or guanxi, the network power so highly valued in China. So they have been accepted into the Chinese business community and seen as companies that are doing things with China and not just for themselves.”

BP, led by its American chief executive Bob Dudley, is one of the biggest foreign energy investors in China, having made commercial investments totalling nearly $5bn and formed more than 30 joint ventures there since 1973

It works with Chinese energy companies PetroChina and Sinopec and is co-operating with China National Offshore Oil Group to explore a deep-water project in the South China Sea.

Unilever, whose chief executive is Dutchman Paul Polman, has invested $1bn in China since 1986, directly hiring more than 5,000 local employees.

The group has annual sales in China of nearly 20bn Yuan (£2.1bn) and has a goal to increase this to 50bn Yuan by 2020 as part of a plan to increase business in China in the 10 years from 2009.

Standard Chartered, led by chief executive Peter Sands, is one of the oldest UK companies in China, having opened its first branch in Shanghai in 1858. It now has 100 branches across China, achieving income of $1bn last year.

WPP Group, the advertising group founded by chief executive Sir Martin Sorrell, has been in China since the late 1980s and claims to be the leading marketing communications group in the country with more than 14,000 people and revenues of $1.3bn there.

Greater China is now WPP’s third largest market after the US and the UK, with operations in 80 Chinese cities.

Meanwhile, Burberry, led by chief executive Angela Ahrendts, bought out its Chinese franchise partner in a £70m deal in 2010. China now accounts for 14pc of Burberry’s retail and wholesale revenues.

Mr Tappin says many of the successful British companies in China are led by chief executives who draw on their extensive global experience to act as corporate ambassadors for their companies there.

Failing to do so can also explain the trail of companies that haven’t succeeded in China, he says.

10 of the best British companies that have broken through Chinese walls

1. BP is one of the biggest foreign energy investors in China, having made commercial investments totalling nearly $5bn (£3.31bn) and formed more than 30 joint ventures there since 1973.

2. Unilever has invested $1bn in China since 1986, hiring more than 5,000 local employees.

3. Standard Chartered The bank is one of the oldest British companies in China, having opened its first branch in Shanghai in 1858. It earns 90pc of its income from Asia, Africa and the Middle East.

4. WPP Group The advertising group has been in China since the late 1980s and Greater China is now WPP’s third largest market after the US and the UK, with operations in 80 Chinese cities.

5. Burberry, led by chief executive Angela Ahrendts, bought out its Chinese franchise partner in a £70m deal in 2010. China now accounts for 14pc of Burberry’s retail and wholesale revenues.

6. InterContinental Hotels says it is the largest international hotel group in China, with more than 180 hotels across 60 cities, built up since 1984.

7. Intertek The testing group has built on the expansion of China’s electrical goods industry.

8. Diageo The drinks group has made China a priority, and its brands such as Johnnie Walker and Smirnoff are huge sellers.

9. ARM The chip- maker has grown along with China’s importance to the mobile device industry.

10. HSBC The clue is in the bank’s full title, the Hong Kong and Shanghai Banking Corporation.